Attorney General Eric Holder’s sweetheart settlement with Switzerland’s second largest bank, corporate criminal Credit Suisse, sent the wrong message to other corporate barons. Senator John McCain (R-AZ) says it well:

“Nor does the plea deal hold any officers, directors or key executives individually accountable for wrongdoing, raising the question of whether it will sufficiently deter similar misconduct in the future.”

Mr. Holder, of course, touted the deal as tough. Credit Suisse was fined a non-deductible $2.6 billion for their long, elaborate plan to provide tax evasion services for many thousands of wealthy Americans. The bank agreed to plead guilty of criminal wrongdoing – a rare demand on the usually coddled large financial institutions. In addition, Credit Suisse, in Mr. Holder’s words, failed “to retain key documents, allowed evidence to be lost or destroyed, and conducted a shamefully inadequate internal inquiry”… through a “conspiracy” that “spanned decades.”

The bank also agreed to a “statement of facts” that detailed the nature of this conspiracy which is worthy of an international crime thriller and involved hundreds of Credit Suisse employees, “secret offshore accounts” and “sham entities and foundations.” In short, this was a broad-based and coordinated sizable, financial criminal enterprise.

Credit Suisse agreed to turn over information about other banks that may be engaged in similar cross-border crimes and also submitted to an outside, independent monitor for two years.

In return, here is what the corporate lawyers, King & Spalding, for Credit Suisse exacted from the Justice Department:

1. The bank retained its permits and licenses to remain fully operational in the United States.

2. Top management and directors emerged unscathed and were allowed to keep their lucrative positions.

3. State and federal regulators, including the SEC and Federal Reserve, agreed not to take related actions against the bank.

4. Credit Suisse does not have to give the Justice Department and the IRS the names of some 22,000 U.S. customers who engaged in these schemes, citing prohibitive Swiss law, which tough U.S. officials could have challenged with a waiver demand.

These concessions mystified both Senator McCain and Senator Carl Levin (D-MI), the latter having conducted an early inquiry into these crimes.

Credit Suisse’s CEO, American Brady Dougan, immediately issued a statement regretting “the past misconduct,” and then said that the deal will produce no “material impact” on “our operational or business capabilities.”

For comparison, let’s imagine that such crimes were committed by a community bank or a credit union. They would have shut them down and their executives would have been prosecuted, convicted and sent to jail, as many officials were during the savings and loan scandals in the Eighties and Nineties.

In short, Credit Suisse is not only too big to fail but its human schemers at the top rungs of the company apparently are too big to jail. Eight lower level supervisors were indicted. Six of them remain hidden in Switzerland and therefore can’t be extradited.

The aforementioned deal is relevant since it sets a precedent for the many future settlements expected in the near future between the Justice Department and the banks here and abroad. The more members of Congress from both parties howl and the more people demand an end to the double standard of enforcement between the Big Boys and the little guys, the stronger future deals will be and maybe Congress will beef up anemic enforcement budgets and pass stronger legislation regarding the corporate crime wave damaging our country and its people.

There is another problem that needs attention, as described by James Henry, former chief economist at McKinsey &Co. on Democracy Now, to wit:

“Eric Holder used to be an attorney at Covington & Burling, after he left the Clinton administration. He was handling UBS [a large Swiss bank] as a client. The chief IRS legal counsel, Mr. Wilkins, used to be a registered representative for the Swiss Banking Association in Washington, when he was a partner at WilmerHale. You have the U.S. treasury secretary, [who] was in charge of Citibank’s global private banking department when he was at Citibank in 2006…. [And] … one of the key golfing partners of the president of the United States, Robert Wolf, used to run UBS America. He was a big fundraiser for Obama in 2008. So this administration is permeated with people who are basically very sympathetic to Wall Street and to Swiss interests, as well.”

These previous relationships paint a troubling picture. Are these government officials willing to state publically that they are not going back through the revolving door to these law firms or large businesses? It is unlikely that they will deny themselves such a routine return to lucrative positions using the experience they built up, at taxpayers’ expense, to represent future corporate clients in trouble with law enforcement.

Alas, this stronger position against corporate crime is not likely to happen, even though it could save hundreds of billions of taxpayer dollars a year. According to the Government Accountability Office and leading expert, Professor Malcolm Sparrow of Harvard University, at least $270 billion will be drained away this year by the healthcare industry, just in computerized billing fraud and abuse.

Shuttling between governments and law firms has always been a tradition, most prominently exhibited by the powerful Lloyd Cutler in the Seventies and Eighties. The current issue of the Corporate Crime Reporter has published the names of the thirty top corporate criminal defense law firms arranging sixty percent of corporate deferred and non-prosecution agreements. It helps mightily for lawyers to bring their government regulatory experience to these giant power brokers.

Mr. Holder’s plea deal with Credit Suisse has to go for approval to U.S. District Judge Rebecca Smith. There may be intervenors objecting to its lenient terms. Stay tuned.